Fuel cost for power generation drops by 34pc

The cost of fuel for electricity generation in November went down by more than one-third to Rs5.99 per unit from a month ago, according to data recently released by the National Electric Power Regulatory Authority. A 27.1pc reduction in the cost of coal-based electricity contributed to the overall drop of 33.6 per cent in the average fuel cost in November, according to Tahir Abbas, head of research at Arif Habib Ltd. The per-unit cost of coal-generated power dropped from Rs17.61 in October to Rs12.84 in November, thanks to the addition of power plants that operate on Thar coal. Local coal isn’t benchmarked to the international prices and is, therefore, significantly cheaper than its global counterpart. Similarly, the average cost of re-gasified liquefied natural gas (RLNG) also dropped 16.2pc on a monthly basis, which helped bring down the overall cost of fuel for electricity generation in November.